In the breathless atmosphere of "cutting-edge" investments and "next-generation" opportunities, the phone companies don't rate. Perhaps we've known them too long--and too well.

Yet the good old/bad old Baby Bells are a critical link in the value chain of the enabling technologies necessary for the Internet to be viable commercially, meaning speeded up, so that your Internet news broadcasts no longer resemble man's first walk on the moon.

And unlike so many other stocks of companies in that space, their prices are reasonable (with P/E ratios below that of the average stock in the Standard & Poor's 500-stock index), their earnings rising, their survival and growth secured.

For the price of a single share of Yahoo Inc., you could buy a share in each of the companies remaining from the breakup of AT&T: Bell Atlantic Corp., SBC Communications Inc., BellSouth Corp. and US West Inc. Yahoo brought in about $540 million in revenue last year. The combined revenue of the four Baby Bells last year was about $90 billion.

I receive a fair amount of mail from people looking for less risky ways to invest in the new economy. If you're in that category, you might want to do some research into the Baby Bells. While we think we've known them, I'm not sure many of us do.

Yes, they still provide voice services on a wire line. But as a result of mergers, alliances and acquisitions by the Bells, they are becoming major players on the technology stage, "bundlers" of new economy services, without which the Time Warners, the Yahoos and all the rest simply could not blanket the globe; without which the World Wide Web remains the World Wide Wait.

Assuming all these deals come to fruition (some are still waiting for regulatory approval) and you bought each of the remaining Baby Bells, you'd have, among other things, a wire into almost every home in America; a communications presence in 23 countries; a national market for installation of DSL broadband Internet communications; wireless services across the country; and a piece of a new state-of-the-art undersea cable between the United States and Japan.

Thanks to the mating habits of the Bells, which have them hooking up with other communications companies, you'd own what used to be Ameritech, GTE and Qwest along with a partnership with Vodafone AirTouch PLC, the cellular powerhouse. That's because Bell Atlantic has agreed to purchase GTE Corp.; SBC acquired Ameritech in October; and Qwest Communications International Inc. is awaiting regulatory approval of its purchase of US West.

You'd have serious earnings--not so common these days--and even dividends.

What you probably would not get is hyper-growth in stock price comparable to some of the newer companies in telecommunications that, starting from zero, have plenty of room for revenue growth.

On the other hand, if the combinations the Bells have formed follow the leads of Sprint and AT&T and issue tracking stocks for their highest-tech undertakings--a possibility that's been publicly discussed by all of them--you might get serious growth, too.

I frown on tracking stocks by themselves. You don't really know what you own. But if you also hold shares of the core company, tracking stocks are far more attractive.

The closest-to-home example of what the Bells are doing is Bell Atlantic. Five years ago it was just a regional phone company, primarily for talking. Today, its revenue from voice traffic as a proportion of sales has declined significantly, with 80 percent of its telecom revenue growth coming now from sales of data services.

Bell Atlantic Mobile has roughly 7 million customers. Two huge deals are being implemented that could multiply these numbers fast. Bell Atlantic Mobile and Vodafone AirTouch are combining in an alliance to expand the reach of both. On top of this, Bell Atlantic is merging with GTE. The company expects the merger to be complete by spring.

The combined operation will be the largest wireless company in the United States, covering 90 percent of the land and an estimated 21 million customers.

In the realm of broadband, Bell Atlantic is investing $1.7 billion in Metromedia Fiber Network to dramatically expand its fiber-optic capacity. It is also accelerating implementation of the marketing of DSL services throughout the East Coast, with a target of making the high-speed service available to roughly 17 million customers.

With 3Com Corp., it is selling "Broadband in a Box" at retailers such as Staples and CompUSA to help broadband users do it themselves--so they can get it more swiftly, without visits from technicians.

Bell Atlantic recently won regulatory approval to offer long-distance services in New York--a market worth about $7 billion for long-distance providers--and is moving to extend long-distance reach into the $20 billion market that ranges from Maine to Virginia.

Its mission, and that of most of the Bells, is to be able to offer customers a full set of services--everything they need by way of communications--from one company.

What, you may ask, about the competition from cable delivery of broadband, dramatized by America Online's recently announced acquisition of Time Warner and AT&T's cable-company buying binge? Cable is indeed ahead of DSL at the moment. But according to projections in a recent report by the Yankee Group, that long lead will disappear and the distribution between cable access and DSL access will be close to 50-50 by 2004.

If all this is true, you may also fairly ask why their stock prices have not taken off. One reason is that investors tend to prefer that companies of the new economy remain unencumbered by the old. The phone companies still do voice--kind of a drag. Competitive local exchange carriers (CLECS), such as Aether Systems, Nextlink, Teligent and Covad, do only broadband and data, and are hot stocks.

As for wireless, it's hard for an investor interested in the new technology to put money into slow-growth stocks when juicy returns were available from the likes of Qualcomm, the wireless equipment company, which has appreciated 1,500 percent over the past year versus the best of the Bells, Bell Atlantic, with 11 percent price appreciation, plus dividends. That number doesn't mean much up against hyper-growth.

"All the attention is being paid to the smaller upstart" telecommunications companies, said Ian Link, portfolio manager of the Franklin Global Communications Fund. Since the upstarts have no earnings, investors have adopted a "totally different metric and a totally different mind-set" that doesn't quite compute when confronted with such strangeness as dividends. "There's a disconnect," Link said.

The Bells are the largest Internet service providers in the country and the largest cellular providers, yet they "are being completely ignored." But Link said he's been buying the stocks because he believes they are still cheap. He noted their earnings rates are growing--from 8 to 10 percent annually to 12 to 14 percent.

"Investor sentiment has kind of rotated away from your more traditional Baby Bells to the communication equipment companies like Qualcomm," said Dan Gillespie, senior portfolio manager of sector funds for Rydex Funds. "Investors see more potential growth."

The Baby Bells just "aren't sexy right now," agreed Daniel P. Reingold, senior analyst at Credit Suisse First Boston.

Reingold is among the analysts who think the Bells may be a lot more fetching quite soon. He believes some may issue tracking stocks for their wireless or broadband operations.

By deploying "sum of the parts" valuation--in which value is assessed by analyzing the potential price of each distinct part of a company, as if it were trading separately--Reingold comes up with a target price of $102 for Bell Atlantic, which closed trading on Friday at $60.06 1/4. He's also "bullish," he said, on US West (merging with Qwest), BellSouth and SBC.

"Ifs" proliferate.

These companies may or may not issue tracking stocks. At the moment, they are what they are: conservative.

But a conservative entry into the new economy has merits. When mixed with higher-flying stocks, especially, they can be a defensive hedge, even if they never produce large growth.

If the overvalued stocks implode, the undervalued stocks may be the refuge.

(Note: The share price of Bell Atlantic, at $60.06 1/4, is up about 3 percent over 12 months; SBC, which closed Friday at $42.87 1/2, is down 25 percent; BellSouth, at $47.06 1/4, is up 1.3 percent for the past year; US West, at $68.75, is up 12 percent.)

Fred Barbash (barbashf@washpost.com) is The Post's business editor.